
Foreign Direct Investment
According to UNCTAD's 2022 World Investment Report, FDI flows to Greece reached USD 5.7 billion in 2021, above the pre-pandemic level of USD 5 billion recorded in 2019. In the same year, the total stock of FDI stood at USD 45.8 billion. The tourism sector led the way in this investment increase, with dozens of hotel and resort projects incorporated into the government’s strategic investment program which foresees fast-track procedures. Data from the Bank of Greece shows that the countries holding more FDI stock as of 2021 were Germany (18.3%), Luxembourg (17.7%), the Netherlands (16.7%) and Switzerland (8%). Europe as a whole held 87.2% of stocks. In terms of sectors, the ones attracting more foreign investments were manufacturing (17.8%), information and communication (16.2%), real estate (14.4%), wholesale and retail trade (12.9%), and transport and storage (9.2%). As per the latest data by OECD, FDI inflows to Greece totalled USD 4.8 billion in the first half of 2022, a steep increase from USD 1.7 billion recorded in the same period one year earlier.
The country’s strong points include its strategic location, excellent maritime infrastructures (being the world leader in maritime transport), the fact that Greece is one of the main beneficiaries of the Next Generation EU recovery fund as it is set to receive EUR 33 billion (almost one-fifth of GDP) over the next 7 years, and a relatively low labour cost. In recent years, the energy sector attracted considerable investment from Spain, France and China as Greece liberalised its electricity market and reformed its renewable licencing procedure. Furthermore, according to Eurobank, investments valued at EUR 32 billion in infrastructure and real estate, energy and decarbonization, telecommunications and digital upgrades, tourism, and manufacturing are set to drive economic growth in Greece through 2025. Among the country’s weak points, there are the weak performance of the industrial and banking sector (saddled with the largest ratio of non-performing loans in the EU), insufficient investment in R&D, bureaucratic inefficiencies, expensive regulations and uncertainty about the future regulatory regime. Greece does not have an investment screening mechanism; however, the government is currently working on legislation for the development of an FDI screening procedure in line with EU regulation 2019/452. Greece is ranked 53rd out of 82 countries in the Economist Business Environment ranking.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 3,213 | 6,328 | 7,604 |
FDI Stock (million USD) | 39,081 | 42,112 | 49,245 |
Number of Greenfield Investments* | 43 | 49 | 63 |
Value of Greenfield Investments (million USD) | 2,998 | 2,411 | 2,196 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Country Comparison For the Protection of Investors | Greece | OECD | United States | Germany |
Index of Transaction Transparency* | 9.0 | 6.5 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 4.0 | 5.3 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 5.0 | 7.3 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
